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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission file number 1-4682
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THOMAS & BETTS CORPORATION
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(Exact name of registrant as specified in its charter)
New Jersey 22-1326940
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(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
OF INCORPORATION OR ORGANIZATION)
1555 Lynnfield Road, Memphis, Tennessee 38119
- ----------------------------------------- --------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (901) 682-7766
Securities registered pursuant to Section 12(b) of the Act:
- -------------------------------------------------------------------------------
Name of each exchange on
Title of each class which registered
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Common Stock, Par Value $.50 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 9, 1996: $1,574,460,867.
(For purposes of this filing only, the registrant classified all executive
officers and directors as affiliates).
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 9, 1996
- ---------------------------- -------------------------------
Common Stock, Par Value $.50 20,104,143 Shares
DOCUMENTS OR PARTS THEREOF INCORPORATED BY REFERENCE
FORM 10-K PART INTO WHICH THE
DOCUMENT OR PART THEREOF DOCUMENT IS INCORPORATED
---------------------------------- -----------------------------
1995 ANNUAL REPORT TO SHAREHOLDERS PART I, ITEM 1
PART II, ITEMS 5-8
PART IV, ITEMS 14(A)(1)
1996 PROXY STATEMENT PART III, ITEMS 10-13
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
------------------------
(Items either not applicable or not material have been excluded.)
(A),(C) GENERAL DEVELOPMENT AND NARRATIVE DESCRIPTION OF BUSINESS
---------------------------------------------------------
Thomas & Betts Corporation and its subsidiaries("the Corporation")
designs, manufactures and markets, on a global basis, electrical and electronic
connectors and components as well as other related products and accessories,
with manufacturing facilities and marketing activities in North America, Europe
and the Far East. The Corporation's products are sold worldwide through
electrical, electronic and HVAC distributors, mass merchandisers, catalogs and
home centers, and directly to original equipment manufacturer ("OEM") markets.
No one of the Corporation's end users or distributors accounted for more than
4% of the Corporation's 1995 net sales. In North America, the Corporation is
one of the largest manufacturers of electrical connectors and accessories for
industrial, commercial and residential construction, renovation and maintenance
applications, and is a leading supplier of utility poles, transmission towers
and industrial lighting products to the utility and telecommunications
industries. On a worldwide basis, the Corporation designs and manufactures
electronic connectors and flat cable, which are sold primarily to OEMs in the
automotive, computer, office equipment, test equipment, instrumentation,
industrial automation and telecommunications industries.
The Corporation operates in three business segments. ELECTRICAL
CONSTRUCTION AND MAINTENANCE COMPONENTS are sold primarily in North America,
and manufactured and assembled at facilities located in the United States,
Puerto Rico, Canada and Mexico. ELECTRONIC/OEM COMPONENTS are sold in North
America, Europe and the Far East, and manufactured at facilities in the United
States, Europe, Mexico, Japan and Singapore. OTHER PRODUCTS AND
COMPONENTS--principally heaters, heating/ventilation systems, components for
transmission and distribution of electric power, utility poles and
transmission towers, and telecommunications products--are sold primarily in
North America and manufactured in the United States.
Thomas & Betts' objective is to continue to achieve profitable growth by
offering its distributors and its OEM and end-user customers a broad family of
high-quality products and state-of-the-art distribution services and by
maintaining leadership positions in the markets that it serves. Its
strategy for achieving this objective consists of the following elements:
- -DESIGNING CONTINUOUS IMPROVEMENTS AND MAKING CUSTOMER-SPECIFIC
MODIFICATIONS IN WIDELY USED PRODUCTS--allowing value to be added to mature
product lines;
- -SELECTIVELY ACQUIRING PRODUCT LINES THAT COMPLEMENT THE CORPORATION'S
EXISTING PRODUCT LINES--allowing the Corporation to
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reduce significantly the time required to bring new products to its markets;
- -EXPANDING THE USE AND FEATURES OF THE CORPORATION'S STATE-OF-THE-ART
DISTRIBUTOR/MANUFACTURER INTEGRATION ("DMI") SYSTEM--allowing the Corporation
to provide its distributors with an inventory and distribution management
system that achieves significant transaction cost savings for both the
Corporation and its distributors; and
- -GLOBALLY LOCATING AND COORDINATING MANUFACTURING FACILITIES AND MARKETING
PERSONNEL--allowing the Corporation to achieve low-cost manufacturing and to
provide worldwide service to those of its OEM customers with globally
dispersed operations.
Selective acquisitions have been made to broaden Thomas & Betts' business
worldwide. In 1992, the Corporation acquired American Electric, a leading
manufacturer of a broad range of electrical products and accessories; as a
result of this acquisition the Corporation's sales approximately doubled. Since
the acquisition of American Electric, the Corporation has made 13 acquisitions
involving complementary product lines. Recent examples include: the $51.2
million acquisition of Commander Electrical Products, Inc., a Canadian
manufacturer of electrical outlet boxes, in August 1994; the $35.0 million
acquisition of Catamount Manufacturing Co., a manufacturer of cable ties, in
October 1995; and the $220.6 million acquisition of Amerace Corporation, a
manufacturer of electrical components for utility and industrial markets, in
January 1996. Amerace had sales of $215.0 million in 1995. In addition, in
August 1994, the Corporation completed the purchase, for $50.6 million, of a
29% interest in Leviton Manufacturing Co., Inc., a private company that is the
largest U.S. manufacturer of wiring devices.
The Corporation was established in 1898 as a sales agency for electrical
wires and raceways and was incorporated in New Jersey in 1917. The
Corporation's executive offices are located at 1555 Lynnfield Road, Memphis,
Tennessee 38119, telephone number (901)682-7766.
ELECTRICAL CONSTRUCTION AND MAINTENANCE COMPONENTS(ELECTRICAL)
The Corporation's electrical construction and maintenance components
market includes industrial, commercial and residential construction and
renovation companies, electrical contractors, telephone companies and
telecommunications businesses, and maintenance, repair and overhaul operations
("MRO") customers. Total Electrical Construction and Maintenance Components
sales were $611.7, $516.9 and $444.5 million, or 50%, 48% and 46% of the
Corporation's total sales, for 1995, 1994 and 1993, respectively.
The Corporation designs, manufactures and markets thousands of different
electrical connectors, components and other products for industrial, commercial
and residential construction applications, including (i) fittings and
accessories for electrical raceways; (ii) fastening products, such as plastic
and metallic ties for bundling wire and flexible tubing; (iii) terminals for
small wires and power
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cables; (iv) power connectors, such as compression and mechanical
connectors for high current power and grounding applications; (v) indoor and
outdoor switch and outlet boxes, covers and accessories; (vi) floor boxes;
(vii) metal framing used as structural supports for conduits, cable trays,
electrical enclosures and lighting raceways; (viii) ground rods and clamps;
(ix) products for outdoor security, roadway and adverse and hazardous location
lighting; (x) circuit breakers, safety switches and meter centers; and (xi)
other products, including insulation products, wire markers and application
tooling products.
The Corporation markets its electrical components under various brand
names. These brand names and the related products include THOMAS & BETTS, T&B
and CATAMOUNT electrical products and electricians' supply products, TY-RAP,
TY-FAST and CATAMOUNT cable ties, STEEL CITY, BOWERS, COMMANDER and UNION
switch and outlet boxes, covers and conduit fittings, STA-KON terminals, STEEL
CITY floor boxes and wire management systems, PERFECT-LINE outdoor lampholders
and boxes and covers, BLACKBURN and COLOR-KEYED power connectors and grounding
devices, T&B Electricians' Supplies, wire connectors, tools and accessories,
KINDORF and SUPERSTRUT metal framing products, AMERICAN ELECTRIC LIGHTING and
HAZLUX lighting products, THOMAS & BETTS and ZINSCO circuit breakers, safety
switches and meter centers, T&B, CANSTRUT and ELECTROTRAY cable tray, E-Z-CODE
wire markers and ANCHOR meter sockets.
In North America, the Corporation's components for industrial, commercial
and residential construction and industrial MRO customers are sold through
electrical distributors and retail outlets such as home centers and mass
merchants. The Corporation has relationships with over 2,000 national, regional
and independent distributors and buying groups with locations across North
America. The Corporation believes that it has strong relationships with its
distributors as a result of the breadth and quality of its product line,
innovative service programs, product innovation, competitive pricing and brand
name recognition among its customers. The Corporation has a network of factory
and independent sales representatives who work with distributors, end users and
retail outlets to increase demand for its products. The Corporation has
thousands of customers, and no single end user, distributor or retailer
accounted for more than 6% of the Corporation's Electrical Construction and
Maintenance Components segment 1995 net sales.
The Corporation also manufactures and distributes its components outside
the United States. Certain of the Corporation's standard components are sold in
countries where they conform to the applicable local electrical requirements,
while other components are specifically designed and manufactured to conform to
local standards. The Corporation also markets electrical components through
offshore sales agents and domestic exporters.
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ELECTRONIC/OEM COMPONENTS(ELECTRONIC)
The Corporation's electronic components are sold primarily to OEMs in the
automotive, information services, office equipment, test equipment,
instrumentation, industrial automation and telecommunications businesses and
commercial offices, with the remainder of the components going to others such
as electronic distributors and contractors. No single end user or distributor
of the Corporation's electronic components accounted for more than 9% of the
Corporation's Electronic/OEM Components segment 1995 net sales. Total
Electronic/OEM Components sales were $297.9, $260.1 and $246.9 million, or 24%,
24% and 26% of the Corporation's total sales, for 1995, 1994 and 1993,
respectively.
The Corporation's electronic/OEM components include: (i) printed circuit
connectors; (ii) IDC connectors for mass termination of flat cables; (iii)
custom-engineered connectors for automotive and professional electronics
applications; (iv) flexible interconnects, flat cables and assemblies for
automotive and other applications; (v) cable ties; (vi) terminals; (vii)
D-subminiature connectors, a broad group of industry standard connectors; and
(viii) modular voice and data connectors, twinax and coax connectors, baluns,
patch panels, jack and wall plates and related components for use in
mainframe-to-terminal systems and personal computer-based local area networks
in commercial properties. These components are sold under various brand names,
including THOMAS & BETTS electronic connectors, ANSLEY flat cable and
connectors, FLEXSTRIP jumpers, TY-RAP, TY-FAST and CATAMOUNT cable ties,
HOLMBERG D-subminiature and card edge connectors, and NEVADA WESTERN, ARMIGER
and EPITOME premises wiring brand names. The Amerace acquisition added the
following products to the Corporation's electronic/OEM components segment:
RUSSELLSTOLL, MAX-GARD and EVER-LOK interconnect components and systems, MIPCO
power connectors, FEEDRAIL trolley busway electrification systems, AGASTAT
electro-mechanical and solid-state devices for timers and relays, and BUCHANAN
terminal blocks and connectors. These Amerace products are sold to electronic
interconnect, trolley busway electrification and industrial markets.
In North America, the Corporation sells its standard components through
electronic distributors and directly to end users, and provides
customer-specific components directly to major OEMs. The Corporation sells
through national, regional and local distributors serving a large customer base.
The Corporation also manufactures and markets its electronic/OEM
components internationally, with design, manufacturing and distribution
capabilities in Europe and the Far East. In Europe and the Far East, as in
North America, electronic/OEM components are sold primarily to automotive,
computer, office equipment, test equipment, instrumentation, industrial
automation and telecommunications markets, and certain of the Corporation's
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electronic components are developed and manufactured for specific customer
applications.
There has been a trend on the part of OEM customers to reduce the number
of their preferred suppliers, focusing on companies that can meet quality and
delivery standards and that have a global presence, a broad product package,
strong design capability and competitive prices. The Corporation has achieved a
preferred supplier designation from many of its most important OEM customers
for electronic components, and continues to seek this preferred status from
other accounts.
OTHER PRODUCTS AND COMPONENTS (OTHER)
The Corporation sells its other products and components, comprised of
heating products, utility poles and transmission towers, telecommunication
components and other components, through distributors and directly to end
users. No single end user or distributor accounted for more than 2% of the
Corporation's Other Products and Components segment 1995 net sales. Total Other
Products and Components sales were $327.2, $299.2 and $266.1 million, or 26%,
28% and 28% of the Corporation's total sales, for 1995, 1994 and 1993,
respectively.
HEATING PRODUCTS
The Corporation designs, manufactures and markets heating products for
commercial and industrial buildings. Products include gas, oil and electric
unit heaters, gas-fired duct furnaces, indirect and direct gas-fired make-up
air heaters, and infrared heaters for the heating, ventilation and air
conditioning ("HVAC") marketplace under the REZNOR and E.K. CAMPBELL brand
names. The Corporation's products are sold through HVAC, mechanical and
refrigeration distributors in over 1,000 locations throughout North America.
TRANSMISSION POLES AND TOWERS
The Corporation designs, manufactures and markets transmission and
distribution poles and towers for North American power and telecommunications
companies and for export. These products are primarily sold to five types of
end users: investor-owned utilities; cooperatives, which purchase power from
utilities and manage its distribution to end users; municipal utilities; cable
television operating companies; and telephone companies. The Corporation's
products include tubular steel transmission and distribution poles and lattice
steel transmission towers. The Corporation manufactures and sells its
transmission towers and its transmission and distribution poles under the
LEHIGH, MEYER and THOMAS & BETTS brand names.
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TELECOMMUNICATION COMPONENTS
The Corporation designs, manufactures and markets T&B aerial, pole,
pedestal and buried splice enclosures, T&B connectors, KOLD-N-KLOSE
encapsulation and sheath repair systems, TY-RAP, TY-FAST and CATAMOUNT cable
ties, and DELTEC specialty devices for cable television companies and telephone
operating companies. These components are sold both directly to end users and
through distributors.
OTHER COMPONENTS
The Corporation designs, manufactures and markets flood, roadway and
security lighting fixtures; and connectors, grounding systems, fastening and
metal framing components for North American power companies and heating,
mechanical and refrigeration ("HMR") product distributors. These products are
primarily sold to four markets: investor-owned utilities, cooperatives,
municipal utilities and HMR distributors. The Corporation's other component
products include BLACKBURN power connectors and grounding systems, AMERICAN
ELECTRIC LIGHTING roadway, security and area lighting fixtures, SUPERSTRUT
metal framing, TY-RAP, TY-FAST and CATAMOUNT cable ties, ANCHOR meter sockets
and, from the Amerace acquisition, ELASTIMOLD power connectors and HENDRIX
cable products. These Amerace products are sold to investor-owned utilities,
cooperatives and municipal utilities, and to the export market.
MANUFACTURING AND DISTRIBUTION
The Corporation employs advanced processes in order to manufacture quality
products. The Corporation's manufacturing processes include high-speed
stamping, precision molding, machining, plating and automated assembly. The
Corporation makes extensive use of computer-aided design and computer-aided
manufacturing (CAD/CAM) software and equipment to link product engineering with
its factories.
The Corporation also utilizes other advanced equipment and techniques in
the manufacturing and distribution process, including computer software for
scheduling, material requirements, shop floor control, capacity planning, and
the warehousing and shipment of products.
The Corporation believes that its products enjoy a reputation for quality
in the markets in which they are sold. The Corporation has implemented quality
control processes in its design, manufacturing, delivery and other operations
in order to further improve product quality and the service level to customers.
These techniques include just-in-time manufacturing programs for more
efficient use of machine tools in manufacturing different products, statistical
process control, statistical problem solving, and other
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processes related to the Corporation's SIGNATURE SERVICE DMI program.
From its origin as a delivery guarantee, SIGNATURE SERVICE has evolved
into a partnership for profitability that encompasses purchasing incentives,
extensive marketing support, training, and service discounts. In 1995, the DMI
program expanded its service to over 500 distributor locations, encompassing
more than 35% of the electrical distributor business, with expectations of
servicing over 60% in 1996. The DMI advanced partnership includes business
cost reduction processes such as automatic stock replenishment, advanced
distributor inventory modeling, automatic receiving, price synchronization,
invoice balancing and summary billing. Combining these business process
redefinitions with a leading effort in electronic commerce such as extensive
use of industry standard Electronic Data Interchange ("EDI") has made the DMI
partnership a success for the Corporation as well as its participating
distributors.
The Corporation manufactures its products on a worldwide basis, with
manufacturing operations throughout North America, in Europe and in the Far
East.
The Corporation purchases a wide variety of raw materials for the
manufacture of its products, including metals such as brass, copper, aluminum,
steel plate, steel strip and malleable iron castings, and resins and rubber
compounds. The Corporation's sources of raw materials and component parts are
well established and are sufficiently numerous to avoid serious interruption of
production in the event that certain suppliers are unable to provide raw
materials and component parts.
RESEARCH AND DEVELOPMENT
The Corporation has research, development and engineering capabilities in
each of the three regions of the world in which it operates in order to respond
locally to its customers' needs and technological requirements. The
Corporation believes that it has a reputation for innovation based upon its
ability to develop quality new and/or improved products that meet the specific
application needs of its customers.
The Corporation allocates significant resources to its research and
development activities. The Corporation's research, development and
engineering expenditures for the creation and application of new and improved
products and processes were $22.7, $20.8 and $18.7 million for 1995, 1994 and
1993, respectively.
The research and development activities of the Corporation are focused on
specific product areas. Certain of the Corporation's recent new products and
enhancements include connectors and enclosures for construction markets, high
density computer connectors and cable assemblies, sealed automotive connectors,
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an innovative outdoor lighting fixture, a computerized portable label printer,
cable tray products and components and gas-fired unit heaters.
PATENTS AND TRADEMARKS
The Corporation owns approximately 1,275 active patents worldwide and has
numerous patent applications currently pending. The Corporation has over 215
trademarks, including THOMAS & BETTS, T&B, TY-RAP, TY-FAST, STA-KON, ANSLEY,
FLEXSTRIP, BLACKBURN, STEEL CITY, KINDORF, HAZLUX, AMERICAN ELECTRIC LIGHTING,
COLOR-KEYED, SUPERSTRUT, PERFECT-LINE, REZNOR, ANCHOR METALS, LEHIGH, MEYER,
NEVADA WESTERN, WESTLINE, HOLMBERG, ZINSCO, E.K. CAMPBELL, BOWERS, AGASTAT,
ALL-LAN, BUCHANAN, FEEDRAIL, MIPCO, RUSSELLSTOLL, CATAMOUNT, ELASTIMOLD and
HENDRIX. While the Corporation considers its patents and trademarks (including
trade dress) to be valuable assets, it does not believe that its competitive
position is dependent solely on patent or trademark protection or that its
operations are dependent on any individual patent or trademark. The
Corporation does not consider any of its licenses, franchises or concessions to
be material to its business.
COMPETITION
The Corporation encounters competition in all areas of its business. The
Corporation competes primarily on the basis of product quality, technology,
price, performance and customer service. There are many companies which
manufacture a number of products which compete with those of the Corporation.
All of the Corporation's products are in competition with products of other
manufacturers, some of which have greater financial and other resources than
the Corporation.
EMPLOYEES
As of December 31, 1995, the Corporation had approximately 8,700 full-time
employees worldwide.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Information regarding business segments is presented in Item 1 (a)and(c)
above, Exhibit 13 hereto and in the Corporation's 1995 Annual Report to
Shareholders on page 34, which is incorporated herein by reference.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
Information relating to operations in different geographic areas is
presented in both Exhibit 13 hereto and in the Corporation's 1995 Annual
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Report to Shareholders on page 35, which is incorporated herein by reference.
The risks attendant to these sales and profits are relatively small because the
operations are in foreign countries that have relatively stable political
systems. It is expected that the international markets will continue to provide
sales growth in the future.
ITEM 2. PROPERTIES
The Corporation has total plant, office and warehouse space of
approximately 6,806,000 sq. ft. in 85 locations in 20 states, the Commonwealth
of Puerto Rico and 14 foreign countries. This space is composed of 3,889,000
sq. ft. of manufacturing space, 2,183,000 sq. ft. of office and
distribution space and 734,000 sq. ft. of idle space.
The following table lists the Corporation's manufacturing locations by
primary segment as of December 31, 1995:
Approximate Area
In Sq. Ft.
No. Of -------------------
Segment Location Facilities Leased Owned
- ------- -------- ---------- ------ --------
Electrical Construction
and Maintenance Components
Arkansas 1 246,000
California 1 36,000
Georgia 2 180,000 158,000
Mississippi 1 237,000
Ohio 1 39,000
Oklahoma 1 108,000
Pennsylvania 2 52,000 52,000
Puerto Rico 4 112,000 28,000
Tennessee 2 457,000
Canada 3 65,000 305,000
Mexico 5 469,000
Electronic/OEM Components
California 1 120,000
South Carolina 2 89,000
England 3 37,000 28,000
Luxembourg 1 27,000 43,000
Japan 1 9,000 247,000
Singapore 2 63,000
Other Products and Components
Kansas 1 38,000
Pennsylvania 1 227,000
South Carolina 1 110,000
Texas 1 136,000
Wisconsin 1 171,000
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The Corporation leases approximately 115,000 sq. ft. of space in Memphis,
Tennessee for its corporate and divisional headquarters. Principal sales
offices and warehouses are located in 2,068,000 sq. ft. of property, over 90
percent of which is leased.
As part of the restructuring initiated in the third quarter of 1994,
approximately 1.3 million sq. ft. of manufacturing and warehouse space was
closed in North America, Puerto Rico, Europe and the Far East in 1995 with most
closures occurring in North America. Within North America, the principal
closure was the Corporation's 420,000 sq. ft. of manufacturing space in
Elizabeth, New Jersey which was donated to a non-profit organization in 1995.
Also as part of this restructuring initiative, was the addition of 1.1 million
sq. ft. of manufacturing and warehouse space in North America, Puerto Rico and
Europe in 1995, principally in North America.
The Corporation has 734,000 sq. ft. of idle manufacturing and office space
primarily in Missouri, Alabama, Pennsylvania and New Jersey not included in the
above table. In 1994, the Corporation recorded an $11 million operating charge
related to these facilities to provide for losses on leases and to reduce owned
facilities to their net realizable values.
ITEM 3. LEGAL PROCEEDINGS
The Corporation is subject to federal, state and local environmental laws
and regulations which govern the discharge of pollutants into the air, soil and
water, as well as the handling and disposal of solid and hazardous wastes. The
Corporation believes that it is currently in substantial compliance with all
applicable environmental laws and regulations and that the costs of maintaining
or coming into compliance with such environmental laws and regulations will not
be material to the Corporation's financial statements.
Owners and operators of sites containing hazardous substances, as well as
generators of hazardous substances, are subject to broad liability under
various federal and state environmental laws and regulations, including
liability for cleanup costs and damages arising out of past disposal activity.
Such liability in many cases may be imposed regardless of fault or the legality
of the original disposal activity. The Corporation is the owner or operator or
former owner of various manufacturing facilities currently being investigated
or remediated, including closed facilities in Anniston, Alabama; Elizabeth, New
Jersey; and St. Louis, Missouri; and its currently operated facilities in Hager
City, Wisconsin and Lancaster, South Carolina. In addition, the Corporation is
investigating two manufacturing plants which were sold by American Electric
prior to its acquisition by the Corporation, located in
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Medora, Indiana and Monroe, Louisiana that may require site remediation.
All but two of the above facilities were purchased by American Electric
from other parties between the years 1985 and 1988. At the time of those
purchases, the sellers gave commitments for indemnification for environmental
liabilities that occurred prior to the purchase of the facilities by American
Electric. There can be no assurances that such indemnities will be honored,
but the Corporation believes that the indemnities will be honored. Subsequent
to the Corporation's acquisition of American Electric, the Corporation has
entered into agreements with the sellers to cooperate with each other in
resolving obligations in connection with the above-mentioned environmental
issues.
The Corporation has received notifications from the United States
Environmental Protection Agency ("EPA") or similar state environmental
regulatory agencies or private parties that the Corporation, along with others,
may currently be potentially responsible for the remediation of eleven sites
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (the "Superfund" Act) or similar state environmental
statutes. Pursuant to the Asset Purchase Agreement dated June 28, 1985 between
American Electric and ITT Corporation ("ITT"), ITT has to date assumed
responsibility for its costs associated with contamination prior to June 1985
at four of these sites. The Corporation has assumed responsibility
for its share of costs at the remaining seven sites. The Corporation has
resolved its liabilities at additional sites not identified herein.
The Corporation was served with an Administrative Complaint by the EPA
which alleged that the Surprenant Wire and Cable facility in Clinton,
Massachusetts, which was owned and operated by American Electric from June 1985
until November 1988, failed to comply with certain requirements of the
Emergency Planning and Community Right to Know Act for the 1987 reporting year
(In The Matter of FL Industries, Inc., EPA Region I Docket No. EPCRA-I-92-1047,
filed April 1, 1992). The EPA's complaint sought a penalty of $176,520. In
January 1996, the Corporation, without admitting any liability for the matters
alleged, resolved this matter with the EPA for a payment of $97,930.
In January 1996 the Corporation acquired Amerace Corporation. Pursuant to
the various environmental laws and regulations described above, Amerace is
investigating or remediating, or may have liability associated with,
contamination at five facilities formerly owned or operated by Amerace, and at
one facility currently owned and operated by Amerace. In addition, Amerace has
received notifications from the EPA or from similar state environmental
regulatory agencies or private parties that Amerace, along with others, may
currently be potentially responsible for its share of
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the costs relating to the remediation of ten sites pursuant to the Superfund
Act, or similar state environmental statutes.
The Corporation is not able to predict with certainty the extent of its
ultimate liability with respect to any pending or future environmental matters.
However, the Corporation does not believe that any such liability with respect
to the aforementioned environmental matters will be material to financial
statements.
The Corporation has been named as defendant in various product liability
and commercial legal actions arising from normal business activities. Although
the amount of any ultimate liability with respect to such matters cannot be
precisely determined, the Corporation does not believe any such liability will
be material to its financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
Date Assumed
Name Position Age Present Position
---- --------- --- ------------------
T. Kevin Dunnigan Chairman of the Board 58 January 1992
and Chief Executive
Officer
Clyde R. Moore President and Chief 42 January 1994
Operating Officer
Fred R. Jones Vice President- 48 August 1995
Finance and Treasurer
(Chief Financial Officer)
T. Roy Burton President-Electronics/OEM 48 March 1994
Division
William A. Fredrick President-Lighting Division 49 March 1994
Uberto Gamaggio President-Thomas & Betts 57 May 1993
Europe
Gregory M. Langston President-Utility Division 40 April 1995
Dick R. McCullough President-Mechanical 42 November 1995
Products Division
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W. Neil Parker President-Electrical 53 February 1996
Components Division
Gary R. Stevenson Vice President- 43 January 1994
Operations
Mr. Dunnigan has been Chief Executive Officer since 1985.
Mr. Moore previously was President and Chief Operating Officer of FL
Industries, Inc.(1990 to 1992) and President of its American Electric
Division from 1985 until its acquisition by Thomas & Betts Corporation
in 1992. He was President-Electrical Division of the Corporation
(1992 to 1994).
Mr. Jones previously was President of ABB Financial Services, Inc.
(1990 to 1992) and Senior Vice President and Chief Financial Officer
of Joy Technologies, Inc. (1992 to 1995).
Mr. Burton previously was Vice President and General Manager of Bendix
Connector Operations (1989 to 1992), Vice President-Information Technology
Operations (1992 to 1993), and Vice President-Aerospace Operations
(1993 to 1994) of Amphenol Corporation.
Mr. Fredrick previously was Vice President-Commercial and Industrial
Lighting Group of the American Electric Division of FL Industries, Inc.
(1988 to 1992) and Vice President and General Manager-Commercial and
Industrial Lighting Group of Thomas & Betts Holdings, Inc. (1992 to 1994).
Mr. Gamaggio previously was Managing Director of Baumann GmbH,
Lichtenstein, (1987 to 1993).
Mr. Langston previously was Managing Director of Square D Australia
(1989 to 1990), Managing Director of Square D Asia Pacific (1991 to 1992),
President of Square D de Mexico (1992) and President of Groupe Schneider
Mexico (1992 to 1995).
Mr. McCullough previously was Commercial Marketing Director of Lennox
Industries (1990 to 1991), Director of Marketing (1991 to 1993) and Vice
President and General Manager (1993 to 1995) of the Corporation's
Mechanical Products Division.
Mr. Parker previously was Vice President of General Electric Canada (1990
to 1992) and President-Thomas & Betts Canada (1995 to 1996). He is also
currently President of Thomas & Betts Limited (1992 to present).
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15
Mr. Stevenson previously was Vice President-Operations of the American
Electric Division of FL Industries, Inc. (1989 to 1992) and Vice President-
Operations of Thomas & Betts Holdings, Inc. (1992 to 1994).
The executive officers were elected by the Board of Directors for a term which
expires on May 1, 1996, the date of the next organizational meeting of the
Board of Directors. Normally, officers are elected for one-year terms or until
their successors have been elected. There exists no special arrangement or
understanding regarding election to executive office other than that described
herein. See Item 11 for information relating to Directors.
PART II
ITEMS 5 THROUGH 8.
Information required by Items 5 through 8 of Form 10-K is included in both
Exhibit 13 hereto and in the Corporation's 1995 Annual Report to Shareholders,
portions of which are incorporated herein by reference as indicated below:
Item No. Pages
-------- -----
5 23 & 37
6 38 & 39
7 20-23
8 24-37
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEMS 10, 11, 12 AND 13.
Registrant, on March 19, 1996 filed with the Securities and Exchange
Commission a definitive Proxy Statement. Information required by Items 10, 11,
12 and 13 of Form 10-K, but not provided herein, is included in the Proxy
Statement and is incorporated herein by reference. Certain of the information
required with respect to executive officers is also set forth in Part I of this
report under the heading "Executive Officers of the Registrant."
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16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
(1) Financial statements.
All financial statements as set forth under Item 8.
(2) Financial statement schedule.
Page
Number
------
II Valuation and Qualifying Accounts 19
Independent Auditors' Report on Financial
Statement Schedule 20
All other schedules are omitted as the required information is
inapplicable or the information is presented in the financial
statements or related notes.
(3) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
(3)(i)Articles of Incorporation, as amended effective
March 8, 1996
(10) Material Contracts
- Credit Agreement dated as of March 29, 1995 among the
Corporation, the banks listed therein and Morgan Guaranty Trust
Company of New York, as agent
- Amendment No. 1 dated as of December 8, 1995 to Credit Agreement
among the Corporation, the banks listed therein and Morgan
Guaranty Trust Company of New York, as agent
- 1990 Stock Option Plan
(12) Statements regarding computation of ratios (Ratio of
earnings to fixed changes)
(13) 1995 Annual Report to Shareholders
Excerpts from the 1995 Annual Report to Shareholders are attached to
the Form 10-K in Exhibit 13. If you
Page 16 of 22
17
have not received the Annual Report to Shareholders, you may
obtain one by writing to the Corporate Relations Department
at Corporate Headquarters.
(21) Subsidiaries of registrant
(23) Auditors' Consent
(24) Power of Attorney
(27) Financial Data Schedule (SEC use only)
The following exhibits are omitted as they are incorporated by reference
as indicated.
(3)(ii) By-Laws - See 1993 Form 10-K.
(4) Instruments defining the rights of security holders, including
indentures.
- Specimen of the Corporation's $150,000,000 aggregate principal
amount of 6-1/2% Senior Notes due January 15, 2006 - See Form
S-4 filed February 13, 1996.
- Stock Purchase Agreement between Thomas & Betts Corporation and
Vishay Intertechnology, Inc., dated July 12, 1994 - See Form
8-K filed July 29, 1994.
- Indenture, dated as of January 15,
1992, between the Corporation and First Trust of New York,
National Association, as Trustee, successor trustee to Morgan
Guaranty Trust Company of New York - See 1991 Form 10-K.
- Specimen of the Corporation's $125,000,000 aggregate principal
amount of 8-1/4% Notes due January 15, 2004 - See 1991 Form
10-K.
- Form of Distribution Agreement for Medium-Term Notes between
the Corporation and Merrill Lynch & Co., dated July 28, 1992 -
See Form 8-K dated July 28, 1992.
- First Supplemental Indenture, dated as of July 28, 1992,
between the Corporation and First Trust of New York, National
Association, as Trustee, successor trustee to Morgan Guaranty
Trust Company of New York - See Form 8-K dated July 28, 1992.
Page 17 of 22
18
(10) Material Contracts
- Agreement and Plan of Merger by and among FL Industries
Holdings, Inc. and the shareholders thereof, the Corporation
and TBC Acquisition Corp., dated as of November 13, 1991, as
amended and restated - See Form 8 filed November 19, 1991.
- Executive Officer Employment Agreement Form - See 1992 Form 10-K
- 1985 Stock Option Plan - See 1992 Form 10-K
- Restricted Stock Plan for Nonemployee Directors - See 1992
Form 10-K
- 1993 Management Stock Ownership Plan - See 1993
Form 10-K
- Thomas & Betts Corporation Executive Incentive
Plan - See 1994 Proxy Statement
- Stock Purchase Agreement between Eagle Industrial Products
Corporation and the Corporation, dated November 1, 1995
regarding the purchase by the Corporation of the stock of
Amerace Corporation - See Form 8-K dated January 17, 1996 and
Form 8-K/A filed January 22, 1996
(b) The following reports were filed on Form 8-K during the last quarter of
1995 and to date:
(1) Form 8-K, dated December 12, 1995, setting forth required
financial information on combined sales and net income of
Catamount Manufacturing, Inc. and the Corporation for 30
days of post-acquisition combined operations from October 28,
1995 through November 26, 1995.
(2) Forms 8-K and 8-K/A, dated January 17, 1996 and January 22,
1996, reporting the acquisition of Amerace Corporation by the
Corporation.
(3) Form 8-K, dated February 12, 1996, reporting the Corporation's 1995
earnings release.
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19
THOMAS & BETTS CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
(IN THOUSANDS)
ADDITIONS
-----------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COST AND OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (DEDUCTIONS) OF PERIOD
----------- --------- --------- ---------- ------------ ---------
Year ended December 31, 1995:
Allowance for doubtful accounts
and cash discounts $4,556 $2,416(1) $ - $(1,030)(3) $5,942
====== ====== ==== ======= ======
Year ended January 1, 1995:
Allowance for doubtful accounts
and cash discounts $5,292 $ 837(1) $(57)(2) $(1,516)(3) $4,556
====== ====== ==== ======= ======
Year ended January 2, 1994:
Allowance for doubtful accounts
and cash discounts $5,103 $1,291(1) $127 (2) $(1,229)(3) $5,292
====== ====== ==== ======= ======
(1) Includes provision of $2,314 in 1995, $1,133 in 1994 and $1,286 in 1993 for doubtful accounts. Remaining amounts
represent net change in cash discount reserve and translation adjustments.
(2) Balance acquired in business acquisitions.
(3) Write-offs of uncollected accounts and divestiture of Vitramon balance of $655 in 1994.
Page 19 of 22
20
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
The Shareholders and Board of Directors
Thomas & Betts Corporation:
Under date of February 8, 1996, we reported on the consolidated balance
sheets of Thomas & Betts Corporation and subsidiaries as of December 31, 1995
and January 1, 1995 and the related consolidated statements of earnings, cash
flows, and shareholders' equity for each of the years in the three-year period
ended December 31, 1995 as contained in the 1995 Annual Report to Shareholders.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for the year 1995.
In connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related consolidated financial statement
schedule as listed in the accompanying index. This financial statement
schedule is the responsibility of the Corporation's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Memphis, Tennessee
February 8, 1996
Page 20 of 22
21
SIGNATURES
PURSUANT TO THE REQUIREMENTS TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS ANNUAL REPORT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
THOMAS & BETTS CORPORATION
Signature Title Date
--------- ----- ----
/s/ T. Kevin Dunnigan Chairman of the Board, March 22, 1996
- -------------------------- Chief Executive Officer
(T. Kevin Dunnigan) and Director
/s/ Clyde R. Moore President, Chief Operating March 22, 1996
- -------------------------- Officer and Director
(Clyde R. Moore)
/s/ Fred R. Jones Vice President-Finance and March 22, 1996
- -------------------------- Treasurer
(Fred R. Jones)
/s/ Jerry Kronenberg Vice President-General March 22, 1996
- -------------------------- Counsel
(Jerry Kronenberg)
*/s/ Raymond B. Carey, Jr. Director March 22, 1996
- --------------------------
(Raymond B. Carey, Jr.)
*/s/ Ernest H. Drew Director March 22, 1996
- --------------------------
(Ernest H. Drew)
*/s/ Jeananne K. Hauswald Director March 22, 1996
- --------------------------
(Jeananne K. Hauswald)
*/s/ Thomas W. Jones Director March 22, 1996
- -------------------------
(Thomas W. Jones)
*/s/ Robert A. Kenkel Director March 22, 1996
- -------------------------
(Robert A. Kenkel)
*/s/ Kenneth R. Masterson Director March 22, 1996
- -------------------------
(Kenneth R. Masterson)
*/s/ J. David Parkinson Director March 22, 1996
- -------------------------
(J. David Parkinson)
*/s/ Ian M. Ross Director March 22, 1996
- -------------------------
(Ian M. Ross)
*/s/ William H. Waltrip Director March 22, 1996
- -------------------------
(William H. Waltrip)
* By: /s/ Jerry Kronenberg
----------------------------------
Jerry Kronenberg, Attorney-in-fact
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